Gce Model Questions Vol1 2023 Economics Question 46
Practice objective / multiple choice question 46 from the 2023 Gce Model Questions Vol1 Economics examination.
Economy X and Economy Y are described by the Solow growth model with a Cobb‑Douglas production function \(Y = K^{\alpha} (AL)^{1-\alpha}\) where \(\alpha = 0.3\). The parameters are: - Economy X: saving rate \(s = 0.25\), depreciation rate \(\delta = 0.05\), population growth \(n = 0.02\), and technological progress \(g = 0.01\). - Economy Y: saving rate \(s = 0.20\), depreciation rate \(\delta = 0.04\), population growth \(n = 0.03\), and technological progress \(g = 0.015\). Assuming steady state, calculate the percentage difference in steady‑state output per worker between Economy X and Economy Y. Give your answer to two decimal places.
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About This Question
This is Gce Model Questions Vol1 2023 Economics Question 46. It is one of the objective questions from the 2023 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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